The replication of human immunodeficiency virus, type 1 (Hiv-1) requires the concerted action of two viral trans-activators, Tat and Rev, and is, in turn, moderated by the virus-coded transcriptional repressor, Nef. Rev-Nef- double mutant was also replication negative but had normal Tat function. Complementation of Rev- with Rev caused a decrease of synthesis of Nef accompanied by enhanced synthesis of viral structural proteins. The ability of Rev to modulate Nef solely from the provirus and relieve the inhibition of LTR transcription reveals a delicate balance of the functions of these two proteins. Rev is essential for the expression of mRNAs containing a Rev responsive element (RRE) of about 236 nt in the HIV env ORF. To obtain large quantities of Rev, a TK- vaccinia virus recombinant containing the Rev gene under the control of T7 promoter inserted in the vaccinia TK locus was constructed. In coinfection experiments with vaccinia virus encoding T7 RNA polymerase, 2 - 3 mg of Rev was obtained from 109 cells, and the protein localized to the nucleus shortly after synthesis. With increasing amounts of Nef, there was a dose-dependent decrease of transcription from the HIV LTR. Nef-expressing T lymphoid cell lines repressed LTR activation. Nef-expressing vaccinia virus vTFNnef, was used to infect EBV immortalized AIDS patient T4 lymphocytes which were then used as targets for CTLs. Earliest CTL response was identified against Nef, and two important epitopes were mapped by peptide competition experiments. HIV-1 nef gene was associated with fetal death in transgenic mice, predominantly at the 6- to 8-day stage.